Chan Wan v. Tan Kim [G.R. No. L-15380. September 30, 1960]

30Jul

FACTS

Checks payable to “cash or bearer” were drawn by defendant Tan Kim and were all presented for payment by Chan Wan to the drawee bank, but they were all dishonored. Defendant argued that plaintiff is a holder not in due course.

ISSUE

Whether or not a holder not in due course is barred from collecting the value of checks issued to him.

RULING

NO. It does not that simply because he was not a holder in due course Chan Wan could not recover on the checks. The Negotiable Instruments Law does not provide that a holder who is not a holder in due course, may not in any case, recover on the instrument. The only disadvantage of holder who is not a holder in due course is that the negotiable instrument is subject to defense as if it were non- negotiable.